It is very natural to go through difficult phases in a startup, but it is the experience of a lifetime!
Startups are more of adventure and fun fused together. The exhilaration that comes with its initiation, along with the periods of uncertainty, the victory and failures, strategising at weird hours of the day, and making new connections – all these are worth the effort of starting a startup. Entrepreneurship further comes with its own alluring perks. It gives one the power to create something worthwhile out of nothing. Around two to three decades ago, startups were not common. People thought risks were only for the fools. But isn’t it a wonder that all great inventors, musicians, painters, and entrepreneurs took risks? Be it Einstein, Beethoven, Bill Gates, the Ambanis, and so on – each had to go through excruciating ordeals. But they came out on top.
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It is also a known fact that startups fail for more than one reason. For every successful startup, countless others fail. Here are some reasons why startups fail.
The basic thrust of a business strategy is that it should aim at acquiring more followers and customers. The next step is to monetise those customers and followers through some strategy.
One should not be unrealistically optimistic about such things. Acquiring customers and making them an economically viable source for the company involves a lot of in-depth planning and research. It is not possible to magically acquire followers overnight. It does not work that way always. One must thoroughly research on business models before initiating a startup idea.
It may be the case that you have an excellent business plan on paper, but the end results are not what you expected. This happens when founders fail to keep a quality check over the delivery of final products and services.
People may have expected higher qualities of delivery, and the shortcomings would definitely lead to losing your customer base. One must not let a startup turn into a disorganised company.
Most founders fail to realise when their funds are short, and they also realise it a tad too late. It is important to understand that a steady flow of liquidity is the essence to a startup. And founders must strategise accordingly.
One must understand that CAC (cost of acquiring customers) must be recovered within a period of 12 months for a startup to be successful.
Proper legal standards and codes for startups are important in an upcoming economy. The government of a nation must thrive to give wings to its budding entrepreneurs with access to easy business solutions.
For instance, the Government of India started the Start Up India, Stand Up India Campaign, but it had a few shortcomings. A complicated access ritual to the programme and its benefits completely mar its revolutionary nature. A revision of such campaigns, especially in developing countries is necessary for startups to excel more.
One must not be afraid of collecting feedback from customers in the initial phase. It opens up avenues for product quality assessment. This helps improve service to customers.
If some company loses customers at some point of time, reviews and feedback help understand the problem. This, in turn, provides scope for improvement. Hence, one must always be open to feedback, irrespective of feedbacks being positive or negative.
One must do enough ground work before validating ideas and coming up with products and services. Hence, a strong management team has the potential to take a startup a long way ahead.
But scarce surveys and poor executions of plans lead to delivery of poor quality products and services, which results in customer dissatisfaction. Founders should keep assessing the qualities of the respective management teams.
It is therefore important to research the path you want your company to take well in advance. It avoids unseen problems, and who knows! You might actually be the next Larry Page.